Bharti Airtel Limited: history, ownership, mission, how it works & makes money

A Brief History of Bharti Airtel Limited

Bharti Airtel Limited, founded in 1995 by Sunil Bharti Mittal, is one of the largest telecommunications companies in India and operates in over 18 countries across South Asia and Africa. The company began with a single mobile service offering in Delhi and has since scaled immensely.

In 2001, Airtel was the first private operator to launch mobile services in India. By March 2023, the company had over 490 million subscribers, making it the second-largest mobile network operator globally. In terms of revenue, for the fiscal year 2022-2023, the company reported a revenue of approximately INR 1,22,000 crore (around USD 15 billion).

The introduction of 3G services in 2010 marked another significant milestone. By 2015, Bharti Airtel had launched 4G services across multiple regions. The rollout of 4G allowed the company to capture significant market share in data services, which contributed to over 50% of its total revenue by 2022.

Bharti Airtel expanded its business through strategic acquisitions, including the purchase of Zain's Africa assets in 2010 for USD 10.7 billion, thereby entering the African market. This acquisition allowed Airtel to become a significant player in the continent, serving millions of customers across 14 countries.

In recent years, Bharti Airtel has focused on enhancing its technology infrastructure. As of October 2023, the company has invested approximately INR 700 billion (around USD 8.4 billion) in network expansion and upgrades. This investment has been pivotal in improving service quality and expanding 5G connectivity across various urban and rural areas.

Bharti Airtel also introduced Airtel Payments Bank in 2016, which became a significant player in India's digital banking landscape. By the end of 2022, the bank had over 10 million savings accounts and had processed more than INR 1,00,000 crore in transactions.

Analysts note that Bharti Airtel's market capitalization as of September 2023 was approximately INR 4,27,000 crore, placing it among the top players in the Indian stock market. The company's stock performance has shown strong resilience, with a year-to-date gain of about 35%.

Airtel's competitive pricing and innovative service offerings continue to position it strongly in the rapidly evolving telecommunications landscape. Its focus on digital services, such as Airtel Xstream and online gaming, aligns with consumer trends, further solidifying its market presence.

A Who Owns Bharti Airtel Limited

Bharti Airtel Limited, one of India's leading telecommunications companies, has a diverse ownership structure. As of September 2023, the major stakeholders in Bharti Airtel include both institutional and retail investors, with significant interests held by foreign entities as well.

The Promoter Group, led by the Bharti Enterprises, has been the backbone of Bharti Airtel's operational strategies and initiatives. Sunil Bharti Mittal, the founder and chairman, plays a crucial role in the company's direction and has a significant shareholding. As of the latest available data, he holds approximately 25.00% of the total shares.

Foreign Institutional Investors (FIIs) have shown increasing interest in Bharti Airtel, driven by the growth potential in the Indian telecom sector. Major FIIs include Goldman Sachs, JP Morgan, and BlackRock, contributing to 22.90% of the total shareholding.

Domestic Institutional Investors, comprising mutual funds and insurance companies, hold 12.20% of the stakes in the company. Notable players in this segment include State Bank of India Mutual Fund and HDFC Mutual Fund.

Public shareholders account for the remaining 8.60% of the total ownership. This group comprises retail investors and smaller entities that participate in the stock market.

For better clarity, here is a breakdown of the ownership percentages by category:

The company’s market capitalization was approximately INR 5.92 trillion as of the last trading session in September 2023, reflecting a growing investor confidence amidst competitive market dynamics.

Bharti Airtel continues to pursue strategic partnerships and acquisitions, further attracting institutional interest and strengthening its market position. The ownership structure is likely to evolve as the company expands its footprint in both domestic and international markets.

Bharti Airtel Limited Mission Statement

Bharti Airtel Limited, one of India's leading telecommunications companies, has a mission statement that emphasizes its commitment to providing high-quality communication services. The company aims to enrich lives by leveraging technology to connect people and businesses. The mission reflects the organization's dedication to innovation and customer satisfaction.

The mission statement is supported by a vision of being a global telecommunications leader. Bharti Airtel's core focus areas encompass customer-centric services, network expansion, and digital transformation. This is evident in their strategic initiatives focused on enhancing customer experience and operational efficiency.

Mission Statement Breakdown

• Customer Focus: Provide superior service quality through a robust network.
• Innovation: Leverage cutting-edge technology to drive connectivity.
• Growth: Expand market presence both in India and internationally.
• Sustainability: Commit to responsible business practices that benefit society.

Financial Data and Performance Metrics

As of the latest financial reports for Q2 FY 2023, Bharti Airtel has achieved significant milestones. The company reported a total revenue of ₹35,586 crore, reflecting a year-on-year growth of 22%. Additionally, the EBITDA margin stood at 48%, showcasing strong operational efficiency.

Bharti Airtel's mission is also closely tied to its commitment to expanding its digital services. The company has made substantial investments in its 4G and 5G infrastructure, aiming to improve service delivery and capture greater market share. As of September 2023, the company's 5G rollout is ongoing in several metropolitan cities, with plans for broader coverage.

Furthermore, Bharti Airtel has focused on enhancing its digital ecosystem. With the launch of Airtel Xstream, the company aims to provide comprehensive entertainment solutions, adding significant value to its existing telecommunications services.

Strategic Initiatives Supporting the Mission

To align with its mission statement, Bharti Airtel has undertaken several strategic initiatives:

• Network Expansion: Investment of ₹27,000 crore planned over the next fiscal year to enhance network capabilities.
• Digital Transformation: Continued focus on AI and data analytics to improve customer engagement.
• Partnerships: Collaborations with leading tech firms to innovate service offerings.

In conclusion, Bharti Airtel’s mission statement encapsulates its dedication to providing superior telecommunications services while driving innovation and operational excellence. The company's financial health underlines its successful execution of this mission in a competitive market.

How Bharti Airtel Limited Works

Bharti Airtel Limited operates as one of India's leading telecommunications service providers. As of its latest earnings report in Q2 2023, the company reported a consolidated revenue of INR 36,075 crore, reflecting a year-on-year growth of 22.8%. The firm's net profit also witnessed a significant increase, reaching INR 2,081 crore, up from INR 1,355 crore in the same quarter of the previous year.

Airtel's primary business segments include mobile services, broadband, digital TV, and enterprise services. The mobile segment constitutes the largest share of its revenue, accounting for approximately 55% of total earnings. As of September 2023, the company reported having over 487 million mobile subscribers, establishing it as a key player in the telecommunications sector.

In the broadband sector, Airtel has been expanding its fiber network aggressively. The company reported an addition of approximately 1.1 million new users in Q2 2023, bringing the total broadband subscriber base to 25 million. The average revenue per user (ARPU) for mobile services stood at INR 200, demonstrating a steady increase attributed to the company’s focus on premium offerings and value-added services.

Bharti Airtel also invests heavily in network modernization and expansion. As of December 2022, it had deployed over 400,000 kilometers of fiber network with plans to extend it further. The 5G rollout is another critical focus area, with the company committing around INR 30,000 crore towards network upgrades and expansion over the next two years.

The following table summarizes the financial performance of Bharti Airtel Limited over the last few quarters:

Bharti Airtel's enterprise services have also been growing, contributing to a larger share of revenues. The enterprise segment revenue reached INR 11,000 crore for FY 2022-23, showcasing the increasing demand for data and telecom solutions among businesses.

The company has prioritized digital transformation, launching services such as Airtel Xstream and Airtel Thanks, which aim to enhance customer engagement and retention. Digital revenues, encompassing payments and entertainment services, contributed significantly to overall growth, reporting an increase of 30% in the past year.

In terms of market capitalization, Bharti Airtel stood at approximately INR 5.6 lakh crore as of October 2023, positioning it among the top players in the Indian stock market.

To support its expansive operations and continuing growth, Bharti Airtel has a robust capital structure. The company’s total debt as of Q2 2023 is about INR 1,05,000 crore, with a debt-to-equity ratio of 1.2, indicating a balanced approach to leveraging its assets and financing growth.

Overall, Bharti Airtel operates through a multi-faceted approach, combining extensive telecommunications services with a focus on digital innovation, network expansion, and strategic investments that continue to drive its growth trajectory.

How Bharti Airtel Limited Makes Money

Bharti Airtel Limited generates revenue through a diverse portfolio of services, primarily in telecommunications, but also in digital services, enterprise solutions, and financial technology. In the financial year 2022-2023, Bharti Airtel reported a total revenue of approximately INR 1,25,758 crore, reflecting a growth rate of 15% year-over-year.

Telecom Services

The core of Bharti Airtel's revenue comes from its telecom operations, which include wireless, broadband, and digital TV services. The wireless segment alone contributed INR 92,000 crore in FY 2022-2023, accounting for around 73% of the total revenue. The growth in this segment is driven by an increase in the average revenue per user (ARPU), which reached INR 197 for the quarter ended June 2023, up from INR 183 in the previous year.

Digital Services

Bharti Airtel has also expanded into digital services, which include digital entertainment and content streaming through platforms like Airtel Xstream. In FY 2022-2023, digital services contributed approximately INR 5,000 crore to the company's revenue. The company aims to enhance this segment by integrating more services and partnerships.

Enterprise Solutions

The enterprise solutions segment has seen significant growth, contributing about INR 19,000 crore, representing a robust increase of 20% year-over-year. Bharti Airtel provides various solutions including connectivity, cloud services, and cybersecurity. The IT and network services market in India is expected to grow significantly, positioning Airtel favorably in this sector.

Financial Technology

Airtel Payments Bank is a key player in the financial technology sector. As of June 2023, the bank reported a customer base of over 5 crore users and a substantial increase in transactions, processing over INR 10,000 crore in deposits for FY 2022-2023. This venture diversifies Airtel's income sources and taps into India's growing digital payments ecosystem.

The diverse revenue streams, coupled with strategic investments in infrastructure and customer acquisition, have allowed Bharti Airtel to establish a robust financial standing. As of Q2 FY 2023, the company’s debt-to-equity ratio stands at approximately 1.4, indicating a balanced approach towards leveraging debt while maintaining operational growth.

Additionally, Bharti Airtel's strong market position has led to a stable subscriber base of over 48 crore mobile customers as of December 2023, providing a solid foundation for ongoing revenue generation. The company continues to focus on expanding its network capabilities, including the deployment of 5G technology, which is expected to further enhance its service offerings and revenue potential in the coming years.